1

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

NAGPUR BENCH : NAGPUR

WRIT PETITION NO.683 OF 2006

1) The Commissioner of Central

Excise, Central Excise Building,

Telangkhedi Road, Civil Lines,

Nagpur.

2) The Assistant Commissioner

of Central Excise, Division-II,

Nagpur. ... Petitioners

- Versus -

1) M/s. Indorama Textiles Ltd.,

A-31, MIDC, Industrial Area,

Butibori, District Nagpur, through

the Assistant General Manager

(Excise and Customs).

2) The Joint Secretary to the

Government of India, Ministry of

Finance, Department of Revenue,

2

14, HUDCO Vishala Building,

`B' Wing, 6th Floor, Bhikaji Cama

Place, New Delhi – 110 066. ... Respondents

-----------------

Shri A.B. Chaudhari, Assistant Solicitor General for the

petitioners.

Shri M.G. Bhangde, Senior Counsel for the respondent No.1.

----------------

Date of reserving the judgment : 20/4/2006

Date of pronouncing the judgment : 3/5/2006

CORAM : D.D.SINHA AND R.C.CHAVAN, JJ.

DATED : MAY 3, 2006

JUDGMENT (PER D.D.SINHA, J.) :

Rule returnable forthwith. Heard finally by consent of

Shri Chaudhari, learned Assistant Solicitor General for the

petitioners, and Shri Bhangde, learned Senior Counsel for the

3

respondent no.1.

2) The facts and circumstances, which have given rise to

filing of the petition are as under :

The respondent no.1 M/s. Indorama Textiles Limited is

a Company registered under the Companies Act, 1956 and

holding Central Excise Registration No. AAAC1530LXM001 for

manufacture of spun yarn falling under Chapter 55 of the

Schedule to the Central Excise Tariff Act, 1985. The respondent

no.2 is a Joint Secretary to the Government of India, Ministry of

Finance, Department of Revenue, vested with the powers to act

as a revisional authority under Section 35-EE of the Central Excise

Act, 1944 (for short, `the Act').

3) The respondent no.1 filed 45 rebate claims amounting

to Rs.1,46,90,995/- (Rs.75,42,487/- + Rs.71,48,508/-) in the

month of November/December 2004 in respect of export of

polyester/cotton yarn cleared against ARE-2 on payment of

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Central Excise duty. The amount of rebate claimed includes

Central Excise duty paid on the finished goods exported and also

on raw materials used in the manufacture of exported goods. In

other words, the rebate claim of the assessee comprised of the

duty paid on the raw materials as well as duty paid on the

finished products. The assessee exported these goods on payment

of Central Excise duty in the Cenvat Account for which the said

rebate claims were filed under the provisions of Rule 18 of the

Central Excise Rules, 2002 (for short, `2002 Rules').

4) A show cause notice dated 11.1.2005 was issued to the

respondent no.1 whereby the assessee was called upon to show

cause to the Deputy Commissioner of Central Excise, Division-II,

Nagpur as to why the rebate claimed by the assessee should not

be rejected as the same was contrary to the provisions of Rule 18

of the 2002 Rules read with Section 11-B of the Act and the

notification issued thereunder bearing No. 19/2004-CE(NT) dated

6.9.2004. The Deputy Commissioner, Central Excise Division-II,

Nagpur rejected the rebate of duty paid on the final product

5

exported as well as the claim of rebate of duty paid on inputs

contained therein vide order dated 28.1.2005. The respondent

no.1 being aggrieved by the said order, filed an appeal with the

Commissioner of Central Excise (Appeals), Nagpur, who vide

order dated 15.3.2005 held that the respondent assessee is

entitled to one of the claims for rebate of duty paid either on

exported goods or on inputs used in the exported goods and,

therefore, remanded the case to the lower Authority to decide the

claim of respondent no.1 for rebate of duty after granting

personal hearing to the respondent no.1. The respondent no.1

being aggrieved by the decision of the Commissioner of Central

Excise (Appeals) filed revision application before the Joint

Secretary to the Government of India in view of provisions of

Section 35-EE of the Act, who, vide impugned order dated

22.8.2005 accepted the claim of the respondent no.1 for rebate of

duty paid on exported goods as well as inputs used in the

exported goods and allowed the revision. Being aggrieved by the

said order, the petitioners have filed the present petition.

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5) Shri Chaudhari, learned Assistant Solicitor General for

the petitioners, contended that in exercise of power conferred by

Section 37 of the Act and in supersession of the Central Excise

Rules, 1944, the Central Government made Central Excise (No.2)

Rules, 2001. It was contended that the said Rules, which came

into force with effect from 1.7.2001, continued to hold the field

until new Rules, namely, Central Excise Rules, 2002 came into

force with effect from 1.3.2002. The said 2001 Rules lost their

relevance and, therefore, entitlement of the respondent no.1 for

rebate of duty was required to be considered in view of Rule 18 of

the 2002 Rules, which reads thus :

“Rule 18 - Rebate of duty – Where any goods are

exported, the Central Government may, by notification,

grant rebate of duty paid on such excisable goods or

duty paid on materials used in the manufacture or

processing of such goods and the rebate shall be subject

to such conditions or limitations, if any, and fulfillment

of such procedure, as may be specified in the

notification.

Explanation - “Export” includes goods shipped as

7

provision or stores for use on board a ship proceeding to

a foreign port or supplied to a foreign going aircraft.”

It was contended that the revisional Authority is wholly wrong in

relying upon Rule 12 of the old Rules of 1944 and old notification

Nos. 40/2001 and 41/2001 in order to hold that the respondent

no.1 is entitled for rebate of duty paid on both the items. It was

further contended that the revisional Authority completely

ignored the provisions of Rule 18 of 2002 Rules as well as

notification Nos. 19/2004 and 21/2004 issued under Rule 18 of

the 2002 Rules.

6) The learned Assistant Solicitor General for the

petitioners contended that the word `or' occurring in Rule 18 of

the 2002 Rules is conjunctive. The dictionary meaning of the

word as per Concise Oxford Dictionary is : “1. introducing the

second of two alternatives (white or black), 2. introducing the

only remaining possibility of choice given.” This means that the

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usage of the word `or' in Rule 18 indicates that an assessee has a

choice to make between the two alternatives. The wordings of

Rule 18, therefore, cannot be construed to mean that the assessee

has an option of both the things simultaneously in one single

case.

7) Learned Assistant Solicitor General Shri Chaudhari

submitted that the rebate can be claimed by the assessee either

on the duty paid on final products, which are exported or on duty

paid on inputs used in the manufacture of final products, which

are exported, is clear from the fact that there are two separate

notifications issued under Rule 18 of the 2002 Rules prescribing

separate procedure to be followed for claiming rebate. Those are

Notification No. 19/2004 Central Excise (NT), which prescribes

the procedure to be followed for claiming rebate of the duty paid

on export of goods and Notification No. 21/2004 – Central Excise

(NT), which prescribes procedure to be followed for claiming

rebate of duty on the excisable material used in the goods

exported. It was, therefore, contended that there are two

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separate procedures prescribed for claiming rebate under each of

these situations, which demonstrates that simultaneous claiming

of rebate on both the duty paid on the final product and also on

the goods used for manufacture of the goods exported is not

contemplated in Rule 18 of the 2002 Rules and, therefore,

respondent no.1 is not entitled to claim rebate simultaneously on

both these items.

8) It was further submitted by the learned Assistant

Solicitor General for the petitioners that the contention of the

assessee that the export of goods is permitted under ARE-2

procedure and that the ARE-2 proforma is a combined proforma

for claiming both input stage rebate as well as rebate on the final

goods and, therefore, assessee is entitled to claim rebate on both

is not correct. The proforma like ARE-2 is not an authority on

which entitlement of the respondent no.1 for grant of rebate can

be decided. The claim of the respondent no.1 for grant of rebate

can only be decided on the basis of provisions of Rule 18 of the

2002 Rules and notifications issued thereunder. The wording of

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Rule 18 of the 2002 Rules clearly indicates that the rebate is

available to an assessee in respect of either duty paid on goods

exported or in respect of inputs used in the manufacture or

processing of finished goods, which are exported. It was further

contended that the revisional Authority by ignoring procedure and

scheme stipulated under Rule 18 of the 2002 Rules as well as

notifications issued thereunder wrongly considered and relied on

earlier rules and notifications, which are no longer relevant and,

therefore, findings recorded by the revisional Authority in the

impugned order cannot be sustained in law.

9) Shri Bhangde, learned Senior Counsel for the

respondent no.1, submitted that while considering provisions of

Rule 18 of the 2002 Rules, the observations made in the

impugned order by the revisional Authority are relevant, which

read thus :

“Government notes that as a principle and a policy

measure, Government has accepted that export of

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goods from India should be relieved of domestic levies

(both Customs and Central Excise) in order to promote

export of domestic products from India and to make

them internationally competitive.”

It was contended that the above statements made in the

impugned order are not disputed by the petitioners and,

therefore, the undisputed position is that object of the Rule in

question is to relieve the export of goods from India from Central

Excise duty with a view to promote export of domestic goods in

order to make them globally competitive.

10) Learned Senior Counsel for the respondent no.1

contended that the Central Government has issued notification

No. 19/2004 and 21/2004, both dated 6.9.2004, under Rule 18

of the 2002 Rules providing for rebate of Central Excise duty paid

on exported goods and materials used for manufacturing the

exported goods respectively. There is no clause in these

notifications laying down that availment of rebate under any one

of them will bar availment of rebate under the other. Thus, it is

12

clear that the Central Government has provided for simultaneous

availment of rebate of duty on both, i.e. exported goods and

inputs required in manufacture thereof. It was further contended

that under old Rule 12 rebate of duty on export goods and inputs

required for manufacturing thereof was permissible

simultaneously. The Central Government has issued Circular

No. 354/66/2001-TRU dated 21.6.2001 laying down that “3.

There is no basic change in the rules now notified.” It is,

therefore, clear that under Rule 18 of the 2002 Rules also rebate

has to be allowed on both, i.e. exported goods and the inputs

required for manufacturing thereof.

11) Learned Senior Counsel Shri Bhangde vehemently

argued that the word “or” is normally disjunctive and the word

“and” is normally conjunctive, but at times they are read vis-a-vis

to give effect to the manifest intention of the Legislature as

disclosed from the context. If the literal reading of the word

produces an unintelligible or absurd result, in such situation,

word “and” may be read as “or” and the word “or” may be read as

13

“and”. In order to substantiate his contentions, reliance is placed

by the learned Senior Counsel on the judgment of the Apex Court

in Prof. Yashpal and another v. State of Chhattisgarh and others

[(2005) 5 SCC 420).

12) It was further contended by learned Senior Counsel

Shri Bhangde that in the instant case, though Rule 18 of the 2002

Rules uses the word “or”, the same is required to be read as

“and”, otherwise inequitable result would follow, such as Rule

19(1) of the 2002 Rules provides for export of goods without

payment of duty and Rule 19(2) provides for procurement of

inputs in the manufacture of exported goods without payment of

duty. Thus, both the exported goods as well as inputs are free

from payment of duty. If contention of the petitioners is

accepted, then the exporter, who follows Rule 18, will get rebate

of duty paid either on the exported goods or on the inputs used in

the manufacture of exported goods whereas exporter, who

follows Rule 19 is exempted from duty at both stages and,

therefore, analogy proposed by the petitioners so far as Rule 18 is

14

concerned, in the context of the above referred facts, would result

in discrimination.

13) Similarly, learned Senior Counsel Shri Bhangde

contended that exporter may follow Rule 19(1) and export goods

without payment of duty and procure the inputs on payment of

duty and claim rebate under Rule 18, which the Department will

permit and, therefore, will get benefit of non-payment of duty

and/or rebate at both the stages. It was further contended that

the exporter under Rule 19(2) may procure the inputs free from

payment of duty and make payment of duty on exported goods

and pray for rebate of duty paid on exported goods under Rule

18, which is permissible even as per stand of the Department.

Thus, the exporter will get benefit of non-payment of duty on

inputs and rebate of duty on the final products.

14) It was further argued by learned Senior Counsel

Shri Bhangde that the above referred examples would show that

if the Department's stand is accepted, inequitable result would

15

follow, which would result in discrimination. It is a settled law of

interpretation that inequitable result should not follow while

interpreting the provisions of law. In order to substantiate this

contention, reliance is placed by the learned Senior Counsel on

the judgment of the Supreme Court in Hindustan Petroleum

Corporation Ltd. v. Collector of C. Excise (1995 (77) ELT 256). It

was, therefore, contended that Rules 18 and 19 of the 2002 Rules

are required to be read as complementary to each other so as to

provide equitable results. This can be achieved only by permitting

rebate of duty on the exported goods as well as on inputs used in

the manufacture thereof.

15) We have given anxious thought to the various

contentions canvassed by the respective Counsel for the parties

and perused the relevant provisions of the Central Excise Act and

Rules as well as the impugned order. The following facts are not

in dispute :

(a) Rule 12(1) of the Central Excise Rules, 1944 dealt with

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rebate of duty paid on the materials used in manufacture of goods

exported as well as rebate of duty paid on goods exported. Rule

12(1) permitted grant of rebate of -

(a) duty paid on the excisable goods,

(b) duty paid on materials used in the manufacture of

goods.

Under the aforesaid Rule, the assessee was entitled to get rebate

of duty paid on excisable goods as well as materials used in

manufacturing of goods.

(b) The Central Government in exercise of power conferred

on it under Section 37 of the Central Excise Act, 1944 and in

supersession of the Central Excise Rules, 1944, except in respect

of things done or omitted to be done before such supersession,

made Central Excise Rules, 2001, which came into force on

1st July 2001. Rule 18 of the said Rules dealt with rebate of duty

paid on goods.

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c) The Central Government in exercise of powers

conferred by Section 37 of the Central Excise Act, 1944 and in

supersession of the Central Excise (No.2) Rules, 2001 made

Central Excise Rules, 2002. Rule 18 thereof reads thus :

“Rule 18 – Rebate of duty : Where any goods are

exported, the Central Government may, by notification,

grant rebate of duty paid on such excisable goods or

duty paid on materials used in the manufacture or

processing of such goods and the rebate shall be subject

to such conditions or limitations, if any, and fulfillment

of such procedure, as may be specified in the

notification.

Explanation - “Export” includes goods shipped as

provision or stores for use on board a ship proceeding

to a foreign port or supplied to a foreign going

aircraft.”

(d) The Central Government in exercise of power conferred

by Rule 18 of the Central Excise Rules, 2002 and in supersession

of the Ministry of Finance, Department of Revenue, notification

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No. 40/2001- Central Excise (NT) dated 26th June 2001 (G.S.R.

469(E) dated 26th June 2001) issued notification No. 19/2004 –

Central Excise (N.T.) dated 6.9.2004, directing grant of rebate of

whole of the duty paid on all excisable goods falling under the

First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986)

exported to any country other than Nepal and Bhutan subject to

conditions and limitations as well as procedure specified in the

said notification. Similarly, in exercise of power conferred by Rule

18 of the Central Excise Rules, 2002, the Central Government

issued notification No. 21/2004-Central Excise (NT) dated

6.9.2004 in supersession of Ministry of Finance, Department of

Revenue, notification No. 41/2001-Central Excise (N.T.) dated

26.6.2001 whereby the Central Government has directed that

rebate of whole of the duty paid on the materials used in the

manufacture or processing of such excisable goods, which are

exported, be paid subject to conditions and procedure specified

under the said notification.

16) In the backdrop of the above referred facts, it is evident

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that Rule 12 of the Central Excise Rules, 1944 has been

superseded by the Central Excise Rules, 2001. Similarly,

Central Excise Rules, 2001 were superseded by the 2002 Rules.

It is, therefore, implicitly clear that the provisions of the Central

Excise Rules, 1944 and Central Excise Rules, 2001 lost their legal

force after coming into effect the 2002 Rules and, therefore, they

are wholly irrelevant for deciding entitlement of the assessee for

grant of rebate of duty after 1.3.2002, i.e. the date on which 2002

Rules came into force.

17) In the instant case, the respondent no.1 had filed 45

rebate claims in the year 2004 and, therefore, issue as to whether

respondent no.1 is entitled to get rebate of duty paid on the

exported goods and rebate of duty paid on inputs used in the

exported goods simultaneously is necessarily required to be

decided wholly on the basis of Rule 18 of the 2002 Rules.

18) As per settled principles of statutory interpretation, if

language of the statute or rule is clear, free from ambiguity and

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capable of conveying the purpose for which such rule is evolved

and objective to be achieved, the Courts are required to interpret

rule on the basis of language used in such rule. It is no doubt

true that in principle, the Government has accepted that goods,

which are exported from India, should be relieved of domestic

levies in order to promote export of domestic products from India

and to make them internationally competitive and, therefore,

intention of the Legislature was to grant some concession on

duty paid on excisable goods or inputs and in order to achieve this

objective, Rule 18 was evolved whereby rebate of duty paid either

on excisable goods, which are exported, or on inputs is provided.

The intention of the Legislature was not to grant rebate of duty

paid on exported goods as well as on inputs used in such goods

simultaneously, which is evident from the language used in

Rule 18 of the 2002 Rules. If the intention of the Legislature

was to grant rebate of duty paid on excisable goods as well as on

material used in the manufacture or processing of such goods, in

that event, there was no propriety to ask the assessee first to pay

excise duty on these goods when the Department has to refund

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the same in the form of rebate to the assessee. On the other

hand, keeping in view the object to promote export of domestic

products, the Legislature wanted to give some concession by way

of rebate of duty paid on the excisable goods or on material used

in manufacture or processing of such goods and not on both

simultaneously. The language used in Rule 18 of the 2002 Rules

is loud, clear, completely unambiguous and also capable of

conveying the purpose for which Rule is evolved. After taking

into consideration these vital aspects of the Rule, we are of the

considered view that the rebate provided in Rule 18 of the 2002

Rules is only on duty paid on one of the items, i.e. either on

excisable goods or on material used in manufacture or processing

of such goods and, therefore, assessee is not entitled to claim

rebate on both the items simultaneously.

19) In order to consider the purport of Rule 18 of the 2002

Rules, notification Nos. 19/2004 and 21/2004, dated 6.9.2004

issued by the Central Government are relevant. These two

notifications are issued in exercise of power conferred by Rule 18

22

of the 2002 Rules for grant of rebate of duty on the excisable

goods exported as well as grant of rebate of duty paid on the

materials used in the manufacture or processing of such excisable

goods respectively. These two notifications pertain to grant of

rebate of duty paid on two different items. It is, therefore,

evident that these two separate and distinct notifications issued by

the Central Government are consistent with the scheme of

Rule 18 of the 2002 Rules to grant rebate of duty only on one

item. However, the option is with the assessee. In other words, if

the assessee is entitled to get rebate of duty paid on both the

items, there was no necessity for the Central Government to issue

two separate notifications requiring assessee to claim rebate

separately on the duty paid on excisable goods and on inputs.

20) The contention canvassed by the learned Senior

Counsel for the respondent no.1 that the word “or” may be read

as “and” is misconceived since it is wholly inconsistent with the

intention of the Legislature as well as object of Rule 18 of the

2002 Rules. Even at the cost of repetition, we want to express

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that if the word “or” is read as “and” in Rule 18 of the 2002 Rules,

then in that event, we will be doing violence with the language of

the Rule and would be defeating the object to be achieved and

purpose for which Rule is evolved. Such construction of Rule, in

our view, is impermissible in law. On the other hand, in view of

the language used, scheme of the Rule and intention of the

Legislature, assessee is granted rebate of duty paid either on

excisable goods or material used in the manufacture or

processing of such goods and, therefore, word “or” used in

Rule 18 cannot be read as “and”. The Apex Court in para (59) of

its judgment in the case of Prof. Yashpal and another (cited supra)

has observed thus :

“We are of the opinion that having regard to the

constitutional scheme and in order to ensure that the

enactment made by Parliament, namely, the University

Grants Commission Act is able to achieve the objective

for which it has been made and UGC is able to perform

its duties and responsibilities and further that the State

enactment does not come in conflict with the Central

24

legislation and create any hindrance or obstacle in the

working of the latter, it is necessary to read the

expression “established or incorporated” as “established

and incorporated” insofar as the private universities are

concerned.”

Perusal of the above referred observations made by the Apex

Court makes it evident that while considering the issue as to

whether word “or” used in the statute can be read as “and”, the

language, object and purpose for which such statute is evolved

are required to be considered and it is only on such

consideration, appropriate interpretation consistent with the

object of such statute is required to be given, which should further

the cause and the interpretation which defeats the very object of

the statute should be avoided since such interpretation would

defeat the very intention of the Legislature. The observations of

the Apex Court, in our view, are of no help to the respondent

no.1.

21) Another contention canvassed by Shri Bhangde, learned

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Senior Counsel for the respondent no.1, that Rules 18 and 19 of

the 2002 Rules are required to be read as complementary to each

other so as to provide equitable result is also misconceived. The

area of operation and the situation in which these Rules operate

are totally different and distinct and, therefore, cannot be equated

with each other. So far as Rule 18 is concerned, it deals with

entitlement of assessee for grant of rebate of duty already paid on

excisable goods or material used in the manufacture or processing

of such goods. It is, therefore, evident that Rule 18 is attracted

only after payment of excise duty on excisable goods or on

material used in the manufacture or processing of such goods for

the purpose of getting rebate of duty subject to such conditions

and limitations, if any and after fulfillment of such procedure as

may be prescribed in the notification. The scheme and procedure

prescribed under Rule 19 is altogether different than the one

prescribed in Rule 18 and contemplates export of such excisable

goods as well as material used in manufacture or processing of

such goods without payment of duty subject to conditions,

safeguards and procedure specified by the notification issued by

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the Board and, therefore, it cannot be equated with Rule 18.

Rule 18 is attracted after payment of duty whereas Rule 19

provides for exemption from duty at the threshold and, therefore,

by very nature of contingencies mentioned in these two Rules, the

benefits provided to the assessee are in two different situations

and at two different stages and, therefore, contention canvassed

by the learned Senior Counsel for the respondent no.1 in this

regard cannot be accepted.

22) Perusal of the impugned order passed by the revisional

Authority shows that the revisional Authority while considering

purport of Rule 18 considered notification No. 40/2001 CE (NT)

dated 26.6.2001, notification No. 41/2001-CE(NT) dated

26.6.2001 and Circular No. 129/40/95-CS dated 29.5.1995 issued

by the Department of Revenue as well as Rules 12 and 13 of the

Central Excise Rules, 1944. It is difficult for us to reconcile as to

how the notifications of 2001 and Rules 12 and 13 of the Central

Excise Rules, 1944 are relevant for the purpose of considering

entitlement of the assessee for grant of rebate of duty paid on

27

goods after Central Excise Rules, 2002 came into force, which are

framed by the Central Government in supersession of the Central

Excise Rules, 2001. Similarly, notification Nos. 19/2004 and

21/2004 dated 6.9.2004 are specifically issued in supersession of

notification No. 40/2001-CE (NT) dated 26.6.2001 as well as

notification No. 41/2001-CE (NT) dated 26.6.2001 respectively.

Thus, notifications of 2001 and procedure mentioned therein are

wholly irrelevant and cannot be relied on for considering the

entitlement for grant of rebate claimed by the respondent no.1.

We have no hesitation to hold that after 2002 Rules came into

force, the entitlement of respondent no.1 for grant of rebate on

duty paid can only be considered as per the procedure prescribed

under Rule 18 of the 2002 Rules as well as notification

Nos. 19/2004 and 21/2004 dated 6.9.2004 issued by the Central

Government under Rule 18 of the 2002 Rules.

23) The entire approach and the procedure adopted by the

revisional Authority, in our view, is wholly misconceived and

completely inconsistent with the provisions of Rule 18 of the

28

2002 Rules. Similarly, reliance placed by the revisional Authority

on the notifications and Rules, which are superseded and have

lost force of law, for deciding entitlement of respondent no.1 for

grant of rebate, in our view, is impermissible in law and,

therefore, findings recorded by the revisional Authority are wholly

misconceived and completely devoid of substance.

24) Similarly, reliance placed by the revisional Authority on

Rule 19 in order to consider the purport of Rule 18 of the 2002

Rules is also misconceived. We have already observed that

Rule 19 operates in a situation, which is totally different and

distinct than the situation in which Rule 18 is attracted and,

therefore, Rule 19 cannot be equated with Rule 18 in that sense of

the term.

25) It is no doubt true that Form ARE-2 is a combined

application form prescribed for export of goods under claim for

rebate of duty paid on excisable materials used in the

manufacture of exported goods and claim of rebate of duty paid

29

on excisable goods. However, that does not mean that both the

benefits can be claimed simultaneously. Similarly, forms ARE-I

and ARE-II are common for notifications issued under Rules 18

and 19 of the 2002 Rules to be used as per requirement of

exporter with option to strike out the portion not applicable. It

does not mean that the benefit of both the notifications can be

claimed simultaneously. In the instant case, as per provisions of

Rule 18 of the 2002 Rules, the respondent no.1 is entitled to

exercise option for grant of rebate of duty paid either on excisable

goods or on the material used in the manufacture or processing

such goods.

26) The approach of the revisional Authority that

introduction of new Rules was only for the purpose of

simplification and they have to be read in the context of old

Rules is perverse. Similarly, change of text does not affect

eligibility to avail the rebate of duty on excisable goods as well as

on inputs simultaneously and substitution of old Rules by the

present new Central Excise Rules, 2002 is only an exercise of

30

simplification of the Central Excise Rules is also misconceived

approach of the revisional Authority. The revisional Authority, in

our view, has completely ignored the fact that the Central Excise

Rules, 2002 are issued by the Central Government in exercise of

power conferred by Section 37 of the Central Excise Act, 1944, in

supersession of the Central Excise Rules, 2001. Similarly,

notifications dated 6.9.2004 are issued by the Central

Government under Rule 18 of the 2002 Rules in supersession of

earlier notifications dated 26.6.2001 issued by the Central

Government. It is well settled that when earlier Rules or

notifications are superseded by another Rules or notifications, the

earlier Rules and notifications lose force of law and, therefore, are

wholly irrelevant for the purpose of considering entitlement for

rebate of duty paid on goods by the assessee and such entitlement

necessarily will have to be considered on the basis of Rules and

notifications, which are in force at the time of making claim by

the assessee. In the instant case, when the claims were made by

the respondent no.1, the Central Excise Rules, 2002 were in force

and notifications of 2004 issued under Rule 18 were holding the

31

field and, therefore, entitlement for grant of rebate claimed by

the assessee can only be considered on the basis of new Rules. In

the instant case, the findings recorded by the appellate Authority,

i.e. Commissioner of Central Excise (Appeals) in the appellate

order dated 15.3.2005, in our view, are just and proper and

sustainable in law and, therefore, same are hereby confirmed.

27) For the reasons stated hereinabove, the impugned order

dated 22.8.2005 passed by the revisional Authority is quashed

and set aside. The matter is remanded back to the competent

Authority to decide the claim of the respondent no.1 for rebate of

duty paid either on the exported goods or rebate of duty paid on

materials used in the manufacture or processing of such goods,

after granting personal hearing to the respondent no.1.

28) The rule is made absolute in the above terms. No order

as to costs.

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